Your business plan spells out your company’s origins, history, mission, and vision, among other things. One of the most crucial portions of this document is the Business Background that allows you to tell clients how you can up with the idea for your business and why you are uniquely placed to solve the pain points that your brand addresses.
When sharing your company’s background, you are doing more than recounting your you developed an idea and launched it into a business. You are also convincing prospective investors that you have the right set of strengths, skills, experience, and personal history to succeed in your business’s mission. You are answering the question, ‘why should I invest in your idea?’
What Is a Business Background?
The business background portion of a business plan is a section that traditionally follows the executive summary. It describes the inspiration behind your business and crucial details about the company itself, such as the location, size, purpose, and mission. Generally, it sets out the direction and focus of your brand, helping potential investors, partners, and lenders understand who you are and what you do.
When you present your business plan to prospective investors, they will turn to the business background portion to check whether your core values align with their beliefs. Think of it as a way to itch your business through words on a page.
What it Includes
The length and content of your company background will depend on how far along you are in your business. As your business grows, so does your background and history. That said, an effective business background should review the following:
Origin: Your company’s origin is the story of how you came up with your business idea and may include details like what inspired you. It should also outline the progress you have made, including relevant milestones, the limitations you have come across, and how you have handled them.
Tip: Sharing your business’s struggles might seem counterproductive, but it actually humanizes your brand and endears you to the reader.
Target Market: Next, your business background should include a summary of your brand’s target market, including your reason for pursuing the opportunity and plans for reaching that market. This is where you get to distinguish yourself from companies producing the same product or service as you.
Qualifications: Lastly, the document should explain why you are the best person to pursue your business idea and what qualifies you to get results. The focus can be your professional experience, but if that is in short supply, you can highlight research that supports the viability of your idea.
For a Brand New Business
As already mentioned, how long your business background is and what it entails will depend on how long your business has been in operation. This is not to mean that you should not work on it if your company is still relatively new, as investors will want to know where you picture your business going. It only means that you might have to switch focus from your company’s successes to your personal history and qualifications. Here are some things to include:
- Your academic qualifications
- Businesses you have launched in the past and how they have faired
- Your professional background (previous employers and job titles)
- Your abilities and technical skills
- Your weakness areas and plan to overcome them
- The professional associations, organizations, or clubs you belong to – must be relevant to your industry.
How to Write a Company Background
Knowing what to include in the document is only the first step in writing the perfect Business Background. The following step-by-step guide should help you through the rest of the process:
Step 1: Summarize Your Story in a Captivating Pitch
The first paragraph of the business background will convince the reader to keep reading or give up on your idea. To achieve the former, start with a section that summarizes all the necessary details about your business and expresses your vision. Think of this part as a pitch.
Step 2: Give an Overall View of the Company
Usually, some of the topics highlighted in this section will be expounded on in subsequent business plan segments. Therefore, keep such topics brief and only provide a summary.
Step 3: Infuse Excitement into Your Tone
Use a tone that conveys the passion you have for your business and its future. As the reader reads this segment, they should be able to tell how dedicated you are to your company’s vision and mission.
Step 4: Check the Length
Writing about something you are passionate about can easily get away from you, resulting in a good but too-long segment. Read through your business background and eliminate any irrelevant or repetitive lines.
Step 5: Proofread
Finally, hand over your draft to a neutral party that hasn’t been present during the writing process and ask them to check it for grammatical or spelling errors and any flaws in the flow. Correct these problems to create a final draft.
Tips for Being Creative
While the backbone of a good business background is information, your tone and presentation play a huge role in how this information is consumed. Overall, you want to share details about your company in an engaging way that draws an investor to keep reading. Here are some tips to help you do this:
- Use images and illustrations to tell your business’s origins and history.
- When illustrating milestones, accompany data with graphs and charts.
- Include news experts that feature your business when establishing the uniqueness of your business approach.
- Use testimonials from satisfied customers to show how your target audience perceives your business.
- Share some of your business’s struggles and how you overcame them. This will make you more relatable to your target audience.
You don’t have to incorporate all these approaches into your business background; in fact, doing so will have the opposite effect. So instead, find one or two tips that work for you and use those.
Drafting the Business Background portion of a business plan is usually the most fun and engaging step in the process. This is because it allows you to talk about the history, inspiration, struggles, and successes behind your business idea. More than tell the client how your business came to be, this portion tells them how you plan to achieve your original goals and serve them in the process. When drafting it, keep the description short, simple, engaging, and specific to your brand.